Home Equity HECM reverse mortgages Protect Women’s Retirement Choices

December 22nd, 2016  | by Alana Stramowski Published in News, Retirement, Reverse Mortgage

Due to the fact that women live longer than men and that women still are only making 79 cents for every dollar men make, they have a more difficult time achieving retirement security. Even with statistics not in their favor, women do still have options when it comes to financially securing themselves as they age.

The first step is to get a financial plan together as early as possible, Jocelyn Wright, director of The American College State Farm Center for Women and Financial Services and assistant professor of women’s studies, said in a recent webinar hosted by the American Society on Aging and sponsored by the National Reverse Mortgage Lenders Association (NRMLA).

And part of that financial plan could include a reverse mortgage, Wright points out.

There are major life events that a large portion of older women go through, which include divorce and becoming a widow. These two life events are tough enough to get through, but they also can derail retirement savings.

One way women can get through these life events and other events similar to them is by tapping into their home equity through a reverse mortgage, Lorraine Geraci, vice president of the training division at Finance of America Reverse (FAR), explained during the webinar.

“I feel it’s imperative that we collectively provide choices to assist older adult women by sustaining financial longevity and establishing peace of mind,” Geraci said.

Obtaining a HECM reverse mortgage will not play out the same for each woman nor will each woman use a HECM reverse mortgage in the same way but all women will lean in to the ready cashflow provided by the home equity line of credit.

There are many different strategies when it comes to figuring out how to use a reverse mortgage to its fullest potential. The first step is to choose between a fixed rate and an adjustable rate home equity conversion mortgage (HECM), Geraci shared.

“An adjustable rate HECM is similar to a home equity loan line of credit except that amount of line of credit is accessible to them whenever they want and also grows while it’s in the credit line, which can increase the amount of equity available to the borrower as times goes on,” she said.

Once the borrower has chosen either a fixed rate or adjustable rate HECM, setting a strategy should be addressed next. A strategy could be anything from using the proceeds to manage long-term care payments, social security planning, income planning or to purchase a new home altogether.

“There’s a lot of folks in the baby boomer generation who would like to move to a different location and with the HECM for purchase program, they can have that option,” Geraci said.

These strategies, if implemented correctly, can change the financial situation for women who do not have an adequate amount of retirement savings and can also help them age in place.

For those new to the idea of a Reverse Mortgage, we call it a HECM to more specifically define it, please consider the magnitude of the information on this page and then call Warren Strycker, Goldwater Bank loan officer for additional information, an analysis of your own opportunity and followup through the process. Call 928 345-1200 nationally (except for New York) or email: wstrycker@goldwaterbank.com.